Business Issues and the Contexts of Human Resources

Topics: Strategic management, Human resource management, Management Pages: 13 (3215 words) Published: April 8, 2013

1. Identification and analysis of major forces shaping the HR agenda within the organisation.

A leaked report, obtained by the Labour Party and compiled by the Association of Chief Executives of Voluntary Organisations (Acevo) has claimed that the charity sector is facing local and national government funding cuts of between £1bn and £5.5bn in the current financial year.

According to an article in Third Sector Online, dated 5 March 2012, The National Council for Voluntary Organisations (NCVO), said the past year had been an "annus horribilis" for charities facing a triple whammy of increased demand, rising costs and an unprecedented fall in income.

The current economic conditions create uncertainty for the organisation over funding streams and we already know that the Charity is facing cuts in 2012-13.

Context and Rationale
Main forces currently having an impact on the Charity stem from the severe austerity measures put in place by the coalition government as these have greatly impacted upon public sector funding. The Charity, similar to other organisations is facing significant cuts to its income at national and local levels. These factors along with our previous trading position have necessitated the Charity reviewing its strategic and operational plans.

To secure its future the Charity must respond to these difficult circumstances. As a result the Senior Management Team, which includes the Director of Human Resources, has reviewed the strategic direction of the Charity in order to respond to the opportunities for growth and expansion that will come as the political and economic cycles revolve.

72% of the operating costs are spent on staff salaries. Any attempt to absorb a significant reduction in income requires a reduction in staff levels. With this in mind, the Human Resource team has been strategically involved in the development of a proposed restructure of the organisation; outlining new staff arrangements to maintain the focus on core services. It is understood that there will be a reduction in the number and composition of the workforce at national and divisional levels and it will be the role of the HR team to undertake the management of the redundancy protocol in order to facilitate this restructure.

A further impact on the HR agenda will be workplace stress as employee mental health becomes high up the agenda.

According to website,

‘there is a very real danger that employers who do not fully understand the impact and effects of work-related stress leave themselves open to the threat of litigation and compensation claims and 1 in 6 HR professionals consider work-related stress litigation to be the single most important law facing employers’.

For further details relating to the major forces shaping the HR agenda please refer to:



2. An examination of HR’s roles within the organisation and the extent to which HR contributes to sound business ethics, effective accountability and organisational effectiveness.

“Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. HRM is now expected to add value to the strategic utilization of employees and that employee programs impact the business in measurable ways. The new role of HRM involves strategic direction and HRM metrics and measurements to demonstrate value.”

Susan M. Heathfield, Guide Oct. 2012

Within the Charity, the HRM function can be split into 3 core areas;

This could be interpreted as being broadly in line with the Ulrich model of HR (1997/98), commonly known as the ‘three- legged stool’, separating out;

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